3 short ideas that just aren't playing out
These stocks are widely hated, but you can't deny their performance.
The action in Tesla Motors (TSLA), Green Mountain Coffee Roasters (GMCR) and Barnes & Noble (BKS) strikes at the core of the dichotomy in this market. These three stocks represent what I call "intellectual shorts," meaning that the intelligentsia in this market truly despises these stocks.
Take Tesla. Here's an $8 billion company that is going to make 21,000 cars that many of the intelligentsia set thinks are worthless. The party line on Tesla is that Chairman and CEO Elon Musk is a blowhard who is not to be trusted. They don't believe that the company is actually profitable, as Musk claims it is. They don't believe the financing numbers. They don't believe the guarantees.
But in the end, it doesn't matter what the intelligentsia believes, because the public likes the Tesla car, Consumer Reports just gave it its highest rating in years, and unless the Securities and Exchange Commission steps in to challenge the numbers, the short-sellers could remain wrong for some time. That is, if they were ever right.
I am bombarded with notes from people urging me to knock Tesla. I have no idea how to value this stock. It is a cult stock involving a cult car, and Elon Musk says that 25% of the people who take a test drive buy it. If that is true, then the company can sell every car it makes from now until kingdom come as long as the quality is high. So the stock can keep percolating higher.
Speaking of percolation, if you look at Green Mountain today, you can see what happens when the intelligentsia gets it right, but it doesn't matter one bit. The rap on Green Mountain was that sales are slowing for the Keurig coffee-making unit, and that, plus the competition from the likes of Nespresso, means that Green Mountain could be a terminal short. Of course, there were also whispers that Starbucks (SBUX) was going to take aim at Green Mountain, and nobody can withstand an enemy like Starbucks. Instead, the two companies announced a five-year partnership that put an end to the notion that these two will be warring anytime soon. The deal also includes the possibility that Starbucks will sell Keurig machines, so there goes a principal leg of the negative thesis.
So it's a good short gone wrong.
Finally, what can be said about Barnes & Noble? You have a billion-dollar company that might be getting a billion dollars from Microsoft (MSFT) for a product that's been crushing the company, even as it is regarded as technologically superior to Amazon.com (AMZN). But a newly invigorated Microsoft, which has an investment in the device already, seems to want the whole device, as long as it isn't stuck with the bookstore chain. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
I know Borders was a loser. I know the book business has never been tougher, courtesy Amazon and the Kindle. But is Barnes & Noble worthless?
Hard to believe.
All three of these are crowded shorts, meaning that so many people have a group-think against them that they are being gang-tackled. But all three have been elusive and have broken away from the tackling and now are off to the goal line.
I know many short-sellers are telling me "just you wait" to see what happens to these companies. I come back and say, "Wait for what? It's already happened."
That's the tough thing about being intellectually right and practically wrong. It's never easy to admit you are wrong, especially when you think you are the smartest investor in the valley. But it has been known to occur many times since this bull market began. Still, these extremes are a little frightening to watch, and you know, in the end, that those who are fighting these moves became cannon fodder for the moves themselves, as they have to bring in their shorts, if only to give back what's left of the money they are investing from people who thought that these managers were really smart.
They were. By half.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
More from TheStreet.com
The Dow is up 85% BEFORE dividends since Obama took office.If you have
brains you`re a hell of a lot better off since the awfull Bush years of 37%
market loses and losing 800,000 monthly jobs.
Well I got sucked in because of one word in the first paragraph..."Intelligentsia"..
Now I don't know if that is really a word, or a play on Spanish 101...??
I'm not going to look it up, and would rather spend my time, making "toast and jelly."
Love how we get a multitude of Articles on two or three Stocks/Companies, after they have taken a "rocket ship ride" a day or so earlier...Going up 10,15, or 20%....Kinda late to buy them now.
I wanna know what the" next soft ice cream" is gonna be...??
Not what has already been.
Steve, in an answer to the our solar plight, from the other article; I've consider looking into some panels to find out what they could produce or save in E-useage.
Have about 10 square of lower roof on Southernly exposure, don't know how many panels it could hold because they vary in size...Usable space is about 25'apx. by 50'. With a small room upstairs convenient to locate any converters or electronics..Don't want batteries there, maybe in basement??
I'm really concerned on ROI...Return/Investment because of our age.
Was interested back in the 70s-80s, but never followed through and it was quite expensive.
Got some hippies living about 3-4 miles from here, they have some of this stuff, was going to stop and pick their brains.
Next comment about Wind Power:
more interesting then Tesla and Green Mountain...
Guess just gonna put "cruise control" on today..Let Markets do their thing.
I'm gonna wait for "anything or everything to happen"..Hoping it turns into an even day..
Me and Lt. Danz have to get busy..
Been a decent week, you all have a nice weekend..
Steve, we have about a 1000' foot field behind our house and barns, it's has timber or woods running along both sides....Always(usually) have a breeze coming off the field...?
Maybe something to do with different temperatures converging out back.
Therefore have been interested in some type of wind power generation for awhile.
I've seen a few simple installations, that I have been impressed with..But don't know a lot of details about power output or residential usage....Let alone cost recovery..
I thought about an installation that would just run lightning and other low amperage equipment.
Never screwed around trying to "short the market or equities" my brother-I/L and I have talked about it.
Because I'm a long and short term investor,just don't want to get anymore involved then what I am..
Maybe too much stress with experimenting to diversely in the Markets.. Who knows..??
Barry, I see your IQ hasn`t gone up.Still name calling and those phony stats
that you`ve been repeating for moths.The fact remains if you had brains, you`ld be
much better off with Obama.I`m getting over $2000 a month in dividends.Don`t
you wish you had brains enough to do that?Just contiue your rants.I`d be bitter
if I had to live in rat infested NY.Thank God I could retre to the SW and try to educate
the right wingers that don`t get it.
Steve....Don't really get any trade or even business mags anymore, Maybe Time and Vet mags(Miss Lilly bought Time from G-kid promotion)....But read articles on Computers or listen to people in bars,clubs and casinos....Like to enjoy my research.
Some of the best tips I ever got were from some 3 paragraph blurb in a newspaper, or some drunk mumbling in a bar...Learned that from some of the best...Investors or business people.
When I first retired, had to use up some freq-flyer promotes...Ordered about 5-6 investment mags for a couple years and WSJ.
Not really a geeky type guy, like to putter.... Drink whiskey and like hamburgers.
But in my last career installed and maintained CATV, CableTV systems in their infancy in the 60s.
Was there when(80s) Fiber Optics/Lightwave was put into the field for practical usage installed and maintained cross-country in 2-3 States, when it was born. Also had worked on cross-country MicroWave transmissions and towers.
Installed and maintained Worldnet/Internet services when it came about more at a National level.
About the last thing I did was put in NGLG.....Where 10s of thousands of circuits could run across the World on very small cables.
Almost got inolved in cell and wireless, but decided to retire after 30 years and a few days...
Couldn't turn it down....Like I said, I'm not really a geeky type guy...Like the nuts and bolts tho'.
Well it was a good day, and a nice week....Markets took care of themselves..
Scumbags and Manipulators lost in the end...
Cruise Control works well sometimes...
"anything and everything can happen"....Sometimes.
Nice to see Alias-Barry-Soetoro finally made an appearance so he could torpedo yet another discussion into a worthless round of offensive and disgusting name calling...
Thank God it's Friday...
So no Monica ABS today .....ah well I am off on a 3.5 day weekend ....have a good one fellows !!
Copyright © 2014 Microsoft. All rights reserved.
Chrysler, Honda and Toyota all count the family shuttles among their top-selling vehicles, while Kia is giving its new model a big push.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.